Why in the News?

Despite ongoing efforts to fight corruption, bureaucratic delays and bribery continue to be major obstacles to business growth in India.

What are the four new labour codes?

• Code on Wages (2019): Standardizes wage-related laws, including minimum wages, timely payments, and equal pay for equal work.
• Industrial Relations Code (2020): Simplifies rules on trade unions, industrial disputes, and employment terms, allowing fixed-term employment.
• Occupational Safety, Health, and Working Conditions Code (2020): Ensures safe working environments, better health standards, and welfare for all workers across industries.
• Code on Social Security (2020): Expands social security benefits like provident funds, insurance, and maternity benefits, including gig and platform workers.

Why is the implementation of the four new labour codes crucial for India’s business environment?

• Simplification of Labour Laws: The four labour codes consolidate 29 existing laws, reducing complexity and making it easier for businesses to understand and comply with legal requirements. For instance, companies no longer need to navigate multiple regulations for wages, as the Code on Wages standardizes definitions and payment rules across sectors.
• Enhancing Ease of Doing Business: By reducing regulatory overlaps and streamlining compliance, the labour codes cut down bureaucratic delays and corruption risks. For example, under the Occupational Safety, Health and Working Conditions Code, a single license can cover multiple locations, simplifying operations for large businesses.
• Greater Workforce Flexibility: The new codes allow for fixed-term employment, enabling businesses to manage workforce needs based on demand without lengthy contractual obligations. For instance, manufacturing firms can now hire temporary workers for seasonal production spikes without facing penalties under outdated laws.
• Ensuring Social Security for Workers: The Social Security Code extends benefits like provident funds and health insurance to gig and platform workers, expanding the safety net. For example, delivery personnel working for online platforms now qualify for social welfare schemes, improving job security and worker welfare.

How can a digital-first approach, such as the ‘One Nation, One Business’ identity system, reduce bureaucratic inefficiencies and corruption in India?

• Simplified Business Registrations and Compliance: Currently, businesses need multiple identifiers like PAN, GSTIN, CIN, and state-specific licenses, leading to duplication and delays.
  • A ‘One Nation, One Business’ system would unify these into a single digital identity, reducing the need for repetitive filings and lowering the chances of officials demanding bribes for faster processing.
• Reduced Human Discretion and Corruption: Digital systems provide automated checks and real-time tracking of applications, minimizing manual intervention.
  • Businesses applying for pollution control certificates or labour permits could do so online, reducing face-to-face interactions where unofficial payments are often demanded to expedite approvals.
• Faster Approvals and Increased Transparency: A unified digital platform, similar to DigiLocker, could store pre-verified documents accessible to all regulatory bodies.
  • This would enable faster processing of approvals like property registrations or drug licenses, reducing the delays and informal payments typically required to move applications through bureaucratic bottlenecks.

What lessons can India learn from global governance models, such as the United States’ Department of Government Efficiency (DOGE)?

• Streamlined Regulatory Processes: The DOGE focuses on simplifying government procedures by reducing redundant regulations and consolidating compliance requirements.
  • India could adopt a similar approach by rationalizing overlapping laws and implementing a single-window clearance system to minimize delays and reduce the scope for corruption.
• Enhanced Digital Integration: The DOGE promotes digital platforms for real-time monitoring and automated decision-making. India could enhance its Digital Public Infrastructure (DPI) by integrating regulatory databases.
• Performance Accountability: The DOGE enforces outcome-based assessments to measure the efficiency of public officials. India could implement performance metrics for government departments.

Way forward: 

• Adopt a Unified Digital Governance Framework: Implement a National Business Identity System to integrate all regulatory processes (e.g., taxation, labour compliance, environmental clearances) under a single digital platform.
• Strengthen Institutional Accountability and Oversight: Establish an Independent Regulatory Oversight Body to monitor public service delivery using performance-based metrics.

Mains PYQ:

Q In the integrity index of Transparency International, India stands very low. Discuss briefly the legal, political, economic, social and cultural factors that have caused the decline of public morality in India. (UPSC IAS/2016)

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